(12-03) 10:09 PST Livermore -- Bill Watkins' $200,000 Bentley convertible is littered with leftovers from Jack in the Box. He's collected $160 million in investor money for his latest company, a high-tech lighting manufacturer called Bridgelux, but rails against venture capitalists. He calls himself a liberal and is against corporate taxation.

None of which is to say he's difficult to pin down. If you want to know what Watkins thinks about something - anything - just ask. For example, the details of his 2009 departure from disk-drive maker Seagate Technology, where he served as chief executive officer for more than five years.

Watkins wanted to place a bet on flash drives through a merger or acquisition, but when he presented the idea to board members, they refused, claiming the stock would take too big a hit.

"I got in a big fight, and to be honest, I personalized it by insulting people and losing my cool. They thought I was going to punch out one of the board members. I didn't, but I did call him, 'You f- mother-,' " Watkins says with a guffaw that nearly makes him choke.

A privately held company founded in 2002, Bridgelux, based in Livermore, generates about $90 million in revenue. It makes LED lighting components, bulbs and arrays that are used primarily in streetlights, office buildings and factories.

When Watkins arrived in 2010, the company was a mess, and he quickly identified a situation like the one he'd just left. Bridgelux was building the right product, but in the wrong way.

More efficient

LEDs are more energy-efficient than other technologies. Unlike incandescent bulbs, which generate light with glowing filaments, or fluorescent lights, which pass electrical currents through mercury vapor, LEDs are basically semiconductor chips that glow. They waste less energy and emit a more focused light.

LED lights, which can last more than a decade and don't contain mercury, are increasingly used in smartphone displays, TVs, cars, billboards and notebook computers. By 2015, manufacturing giant Philips expects LEDs to account for roughly 50 percent of a $100 billion global market for lighting.

Watkins sees even more impressive growth. He says the energy savings that LEDs provide will help drive the overall lighting market toward half a trillion dollars, with LEDs taking the lion's share.

As of early 2010, Bridgelux was manufacturing its own chips using solely synthetic sapphire - a costly material - as the substrate.

Watkins saw an opportunity to reduce his manufacturing costs by as much as 60 percent by working with silicon. But he envisioned more than just manufacturing efficiencies: He wanted to base a new era of smart, inexpensive lighting on silicon chips.

The only obstacle to these would-be wonder bulbs: No one, least of all Watkins, knew how to make them. He had no experience in lighting. He's not even a technologist; he has a liberal arts degree from the University of Texas at Austin. But he and his engineers figured out how to make LEDs on silicon work. "The reason silicon wasn't happening was not because of physics," he says. "It's because it's hard."

Shortly after his arrival, Watkins began a tour to sell venture capitalists on his vision. The VCs were skeptical at first. "People understand when you're asking to buy a piece of equipment with their money, but when you're saying, 'I'm buying a bunch of engineers and putting them in a big room to develop world-changing stuff,' they get really, really nervous," he says of those investor meetings. "That's a hard nut to swallow."

Making his case

While engineers are generally happy to accept money and a challenge, the Bridgelux crew wasn't convinced that Watkins's mandate was even feasible. "Bill made a bold move," says Steve Lester, the company's chief technology officer. "But it wasn't clear that it was going to work. I did a survey of the team early on, and some of them said we had a 10 percent chance of success in two years."

To solve the technological problems, team members came up with a new manufacturing process. Once they had it working on a single chip, they set to stamping out 30,000 at a time on discs of silicon. "A lot of people in the world still don't believe it works," says Lester.

The new process should bring greater automation and allow 20 times as many LEDs to be placed on a single wafer. The net effect would be a reduction in the size of LED light sources and a significant drop in price.

A 17-watt LED bulb, which emits roughly the same amount of light as a 75-watt incandescent, sells today at Home Depot for $40. Watkins expects silicon-based bulbs of similar wattage to sell for $5 within two years. Not long after that, he sees prices dropping to as low as $1 or even 50¢ per bulb. The bigger disruption may come when these low-cost, long-lasting LEDs incorporate all sorts of functionality and make the very notion of a bulb that produces only light anachronistic.

"We want a light that you think about all the time," Watkins says. "Why can't I have a light that's sometimes blue, and with the push of a button on my phone it turns green or white? Why can't I have a light that allows me to cut the energy, that has motion sensors, or that adjusts for reading or TV viewing?

"We're going to give you a reason to change your light bulb. It's the same reason you threw away your last phone - because there's something better out there."

Hardly guaranteed

Bridgelux customers seem convinced that Watkins made the right bet. Intense Lighting, an 11-year-old Anaheim company that sells lighting systems to Target, Nike stores and other businesses, says LEDs have grown to about 50 percent of its sales largely because of the energy savings they provide.

Allan Gray, Intense Lighting's president, thinks lower-priced silicon LEDs will expand the market. "It means we're going to have a better price point on the product, and we can offer it in places that couldn't afford the technology today," he says.

"We work with other suppliers - Philips, Osram. But we consider Bridgelux one of our better partners. When we do our presentations, we talk about their innovations. It's a positive for our company to be involved with them."

Success is hardly guaranteed for Bridgelux. Samsung and two European manufacturers all claim to be readying similar silicon products. Given the expected growth of the LED market, there's potentially room for several players, but a precipitous drop in prices could quickly strip away profit. Or China could just swallow the whole market, the way it did with solar panels.

Facing competition

Watkins says he's aware of these dangers but figures that by continually innovating, he can drive demand and stay ahead of everyone else, China included. "I have a fundamental belief: China steals. They just steal less from their friends," he says.

Almost four years after his departure from Seagate, the dust-up is still fresh in Watkins' mind. He professes to still love the company - "Those guys made me rich!" But his bigger concern is carrying out his plan for Bridgelux, and now he's got a board of directors on his side.

"I told my current board, in two or three years we're going to all look back on this moment and say, 'This is what we did that fundamentally changed Bridgelux, and that's why we're successful,' " he says. "Or you'll all say, 'This is why we fired that dumb -hole.' "